Frank Timis-controlled explorer African Minerals is poised to become the leading shareholder in Cape Lambert Resources via a $31 million scrip deal over the Marampa iron ore project in Sierra Leone.
Frank Timis-controlled explorer African Minerals is poised to become the leading shareholder in Cape Lambert Resources via a $31 million scrip deal over the Marampa iron ore project in Sierra Leone.
Cape Lambert today agreed to issue 57.16 million shares to African Minerals in order to lift its stake in the Marampa iron ore project in Sierra Leone from 35 per cent to 100 per cent.
As a result, African Minerals will become Cape Lambert's biggest shareholder with a stake of 19.9 per cent. Prior to a newly completed large-scale capital raising, Mr Timis held around 20 per cent of African Minerals and is its executive chairman.
African Minerals is one of several companies controlled by Mr Timis, the controversial Romanian-born former Perth deal maker who was convicted of possessing heroin when in his 20s. He is also a long-standing business associate and acquaintance of Cape Lambert executive chairman Tony Sage, with whom he floated gold developer Gabriel Resources in the mid 1990s.
The deal comes a day after shareholders in another Tony Sage-led company, International Goldfields, approved a $152 million takeover of Timis-controlled Eastern Petroleum, giving the oil explorer an 80 per cent interest in the Perth company.
Today's agreement over Marampa supersedes a year-old agreement granting Cape Lambert an option to acquire all of the Marampa project for $US200 million, less all scrip payments for its initial equity and feasibility study expenditure incurred by Cape Lambert.
However, Cape Lambert was able to renegotiate the deal after a recent dispute between African Minerals and UK-based London Mining resulted in a readjustment of tenement boundaries at the Marampa project.
Mr Sage said assuming full control of Marampa would facilitate more cost effective and timely development of the project, where it is targeting iron ore resources in excess of 1 billion tonnes.
Small scale hematite mining was carried out at Marampa for 40 years until 1977 and it remains connected to the Pepel deepwater port by way of an 84km rail link.
Cape Lambert will issue shares to African Minerals in two tranches: 24.57 million shares on settlement; followed by 32.59 million shares subject to approval by Cape Lambert shareholders.
Since selling its flagship Cape Lambert magnetite project to China Metallurgical Corporation for $400 million last year, Cape Lambert has evolved into a listed resources investment company.
It now owns substantial holdings in a string of other listed companies and mining assets, a number of which were picked up through its takeover of the assets of failed copper mine CopperCo. It is currently spinning off CopperCo's Lady Annie mine in Queensland under the Q Copper banner via a $214 million IPO.
As of Monday, the value of its other listed assets (excluding Q Copper) was over $182 million.
Cape Lambert shares were trading 2 cents lower at 55 cents in late afternoon trade, valuing the company at around $295 million.
